In an interview with Interfax-China Stephen Falk, Vice President of Sprint, was asked why he thought that has China delayed the rollout of 3G.
In his answer - and the interview all worth reading - he makes the surprising statement that China would be clever to follow the most advanced 3G countries such as in Japan, Korea and the US, rather than Europe.
Falk: The short answer is I don’t know. I meet with government officials from time to time and I believe they are sincere about believing the Chinese market may not be ready for 3G. As I said earlier, that’s not good thinking. There's an enormous amount of sophistication in this market and a willingness to pay, so you have the two ingredients that are necessary.
On the other hand, I would say it's wise to observe what has worked and what hasn't worked. I used the Europe and Japan example as one to emulate and one not to emulate.
...When I've talked with government officials, vendors and operators in China, I encourage them to look at 3 markets. I believe the Korean and Japanese markets are the most advanced in 3G, and the US, actually.
I think 2 or 3 things have occurred in Europe to slow 3G deployment. I've already mentioned one, the high cost of spectrum, the second was the forklift, the expensive, multibillion dollar forklift for GSM to UMTS, which is not fully deployed across the continent. A number of the larger cities have deployed, but the country side is covered by GSM.
The European market, unlike China, was fully penetrated with a good 2G service. I think the combination of penetration, the cost of spectrum, the cost of the infrastructure construction and the unavailability of good handsets for some time in the initial rollout was probably the factors that made it slower there, and that may have discouraged the Chinese government from being as aggressive on 3G as I think they might have been.
I'd never thought about the US as one of the most advanced 3G markets, probably jaded by the fact that you cannot ever be sure of successfully sending a simple SMS message between carriers.
But I am certain that 3G in the US will be the most significant stimulant of business applications for mobile (because of 3G) and that this will be a shattering and significant force far outweighing the role of Japan and Korea so far in mobile internet. This has been one of my consistent predictions for 2005 - see Prediction #1.
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